Large Michigan Employers Pioneering Changes in Health Care Delivery

By: Nick Deleeuw for the Michigan State Medical Society

Our state and nation are in the midst of one of the strongest and most durable economic booms in modern American history.

 

The United States continues to add about 173,000 new jobs per month, roughly ten times higher than modeled projections,[1] while experts in Michigan clamor for new programs to fill a huge high-skill worker shortage. With statewide unemployment of just 4.3 percent, the competition for talent is demanding.

 

Employers are taking creative measures to attract knowledgeable, experienced workers, and it’s impacting both the practice of medicine and the state’s health care economy.

 

An Emerging Trend

 

Today’s employers report that run-of-the-mill health care coverage is often no longer good enough to land—or keep—the talent they need.[2] When workers are empowered with more choices where to punch the clock, they’re able to shop around for the best fit, pay, and benefit packages. In a changing health care landscape, that benefit package is taking on increasing importance as an essential piece of the “fit.”

 

That’s led large employers across the state to explore value-based medicine, dynamic health care delivery models, and opportunities to increase the quality of care while decreasing health care expenditures.

 

Willis Towers Watson is a leading global advisory, broking and solutions company that helps employers manage risk and support the well-being of their employees and dependents. Its on-the-ground experiences have shown that large employers are looking to improve the health of their workers and optimize the employee experience.

 

“Employers are looking to deliver the right health care at the right time to help employees manage their health conditions through a variety of methods,” said Beth Lieberman, FSA, MHSA, the Michigan Office Line of Business Leader, for Health and Group Benefits at Willis Towers Watson.

 

Lieberman says that approach leads to a wide variety of outcomes and approaches specifically tailored to specific workforces. Telemedicine. Directing members to high quality providers. On-site clinics. The creation and deployment of new technologies, so workers and their families can access care in a way that works best for them.

 

“The conditions most important to many of our clients are behavioral health and metabolic syndrome,” said Lieberman. “Managing the cost of specialty pharmacy [also] is still a concern, to ensure members can access [the] important, life-saving prescriptions [they need].”

 

In other words, employers are driving rapid change in the health care benefits world. But it’s Michigan physicians who are helping them be smart about revolutionizing it.

 

Some of those changes are more sweeping than others.

 

Sheila Savageau is the U.S. Health Care Leader with General Motors, and the woman credited by some in the press with putting “health care middlemen on notice.”[3]

 

General Motors

 

This year, General Motors began offering its 24,000 salaried employees and their families in Michigan a plan that works directly with the Henry Ford Health System, negotiating coverage terms directly with the provider and cutting third-party payers out of the equation.

 

“Ultimately, what I want to achieve for GM employees and their families is better health,” said Savageau. “It’s about the quality of care they are receiving and the better life they’re living, as well as a reasonable, reduced cost.”

 

GM’s move to get insurers (and their mark-up) out of workers’ way began in 2015 while Savageau served as the company’s global benefits director. She and her team redeveloped the company’s strategy, philosophy and principles from a broad benefits perspective.

 

She’d been paying close attention to activity and approach at the Centers for Medicare and Medicaid (CMS) Innovation. CMS had already begun deploying value-based models, and Savageau realized that whenever CMS made a move to lower their costs, “a balloon pops on the employer side.”

 

“I said, let’s take a look, let’s research what CMS is doing, and let’s see how it correlates back to our employee population to see if we can move away from fee-for-service models into a true payment model that pays based on quality and value,” said Savageau.

 

She and GM developed a model, examined their job markets, dug in deep to learn regional carrier models and then in Michigan—where the bulk of the company’s salaried employees work—put out an RFP looking for the right provider relationship. It was a process that led to a framework built around what Savageau calls the 3 Es—experience, engagement, and efficiency—and it led GM to the Henry Ford Health System.

 

Direct-to-employer contracting between Henry Ford and General Motors now ensures that where value in health care increases, it is GM employees who reap the benefits, not third-party payers. Savageau and her team negotiated with Henry Ford 19 quality measures, each with metrics tied to national quality standards. Every measure revolves around those 3 Es.

 

If the national quality standard for C-section rates is at the 85th percentile, then Henry Ford will have to achieve or outperform the national standard. Outcomes are continually measured and monitored, including overall costs.

 

Henry Ford is expected to achieve total cost of care financial targets each year.

 

“It is truly designed to deliver quality, better health outcomes for our members, and at the same time bringing that total cost of care down to where it should be,” said Savageau.

 

It’s an approach that shares both risks and benefits. At the end of each year, a healthier GM workforce—one that’s been well engaged and treated efficiently—creates bonus payments for physician providers. When contractual standards around quality and cost of care aren’t met, penalties result in payments back to General Motors.

 

The Triple Aim

 

Bruce K. Muma, MD, FACP, is the President and CEO of the Henry Ford Physician Network and Medical Director of population health for the Henry Ford Health Systems.

 

Doctor Muma cites the Affordable Care Act in 2009 as the beginning of the value-based care movement. Health care purchasers are finding opportunities to change payment and contracting mechanisms so health care providers are held accountability for the quality, experience and cost of health care.

 

“Providers are held accountable for the value of health care and their payment mechanisms reflect [that] value,” said Doctor Muma. “We’ve been on that journey for 10 years now. The value-based care model continues picking up momentum.”

 

The direct relationship between employer and health care provider also makes the benefit more nimble. The Henry Ford Health System goes out of its way to address issues, make contract fixes, and meet GM’s needs in real time, without going through a big insurance company’s cumbersome and onerous negotiation processes.

 

While GM focuses on the 3 Es, physicians like Doctor Muma take what they call the “triple aim.”

 

Industry leaders describe value as an equation, with a numerator defined as the quality of the care/service/product, plus the experience or service level rendered, divided by the cost. The higher the quality or service level—or the lower the cost—the more value you have.

 

“That three-part equation – the triple aim - is how we define value in health care,” said Doctor Muma.

 

“In the same way that CMS and commercial payers like Blue Cross, Aetna, and Humana are pushing the envelope of value-based care and contracting, large employers are saying, ‘we want more value for what we pay for health care,’” explained Doctor Muma. “The big employers who have the capability to do this—[as well as] the volume—they are beginning to say, ‘we’re going to start to take control of health care contracting so we can ensure more value. We can generate direct contracts with the providers that will create more value.’”

 

GM is a trailblazer, but they’re not the only big Michigan employer redefining the employee health care delivery landscape.

 

The Dow Model

 

Gregg Stefanek, DO, is a family physician employed by QuadMed, a national firm providing innovative, high-value health care solutions to companies designed to improve employees’ health and well-being.

 

Through QuadMed, he serves as the client Medical Director to Dow, a Midland based company with 37,000 employees globally, including 5,300 in Michigan and thousands more in Texas and Pennsylvania.[4]

 

Roughly four years ago, the company contracted with QuadMed to provide dedicated, on-site primary care and other health care services for employees at its Midland headquarters.

 

“We’re charged with supplying Dow with great primary care,” said Doctor Stefanek. “We’re right on Dow’s campus and anyone who has Dow’s insurance can use us.”

 

That includes each of the company’s Michigan employees and their eligible family members—roughly 14,000 men, women and children in total.

 

It’s a trailblazing arrangement for a Michigan firm that takes primary care and ease-of-use to entirely new levels for Dow employees.

 

It’s also a big win for the employer, which is cognizant of their own company-wide health care expenditures. According to Stefanek, available, quality, and appropriate primary care improves health and lowers health care costs. It keeps patients healthier, cuts down on the need for more expensive interventions like trips to the emergency room, and reduces the amount of time off needed to shuttle around town or juggle appointments.

 

Data even shows that adults who have a primary care physician accumulate 33 percent lower health care-related costs.[5]

 

Doctor Stefanek calls the arrangement “a win-win.” Employees get the benefits they desire. They stay healthier. The employer has healthier, happier workers and family members that require fewer costly interventions.

 

The convenience and cost savings that can be achieved through on-site clinics like the one opened this year at Dow are hard to overstate.

 

“We recently saw a patient who came in with pneumonia,” said Doctor Stefanek. “We were able to do a chest x-ray right here. We have x-ray facilities, and laboratory facilities. We were able to do bloodwork, diagnose the pneumonia, give him a bag of IV fluids, give him intramuscular antibiotics, follow up with him the next day and he got charged $10 for that whole visit.

 

“If he’d gone to urgent care or the emergency room, where most practices in the community would have sent him, the cost would have been in the thousands.”

 

Direct-to-employer contracting has many faces. There’s the global value-based contract like what Henry Ford provides GM, on-site primary care like Doctor Stefanek and his team provide Dow, and there’s much more.

 

Employers are looking down additional pathways to create more value in contracting directly with providers to deliver additional on-site medical care and, wellness programs – programs around disease management, diabetes, musculoskeletal conditions – where providers then come in and do programs or provide other types of wellness based services either onsite or offsite.

 

Other employers are looking at centers of excellence contracts, where they contract with a center of excellence to provide workers with additional health options in the event additional consultation is needed (e.g., cardiac patients could consult with the Cleveland Clinic, or arthritis patients could seek specialized joint care at Johns Hopkins).

 

Innovative and patient-minded approaches like these give the employers who deploy them an advantageon the competition for talent.

 

A recent survey by the Harvard Business Review[6] found that 88 percent of respondents identified better health, dental and vision insurance options as key drivers in their decisions whether or not to accept a job—even a job with lower pay. That number was higher than those who were looking for flexible hours, the ability to work from home, tuition assistance, and even unlimited vacation time.

 

Putting It All Together

 

It shouldn’t come as a surprise that Michiganders take their health—and that of their families— seriously. In a field as radically diverse as health care, it’s also not a surprise that large employers and providers take different approaches to meeting myriad health care goals.

 

The 2020 Large Employers’ Health Care Strategy and Plan Design Survey by the National Business Group on Health found that large employers’ top health care initiatives for next year include a broad array of tactics.

 

Fifty-one percent of respondents plan to implement more virtual care solutions, 39 percent are developing more focused strategies on high-cost claims, and 26 percent will look to expand centers of excellence to include additional conditions, like cancer or infertility.[7]

 

Concierge health care services, point-of-sale rebates in pharmacy benefits, and targeted specialty pharmacy management make the list, too, alongside strategies like Dow’s, which will implement direct primary care solutions in select markets.[8]

 

Those are employee asks that more and more Michigan employers are delivering.

 

At GM, beyond the direct benefit provided to salaried employees, workers have access to Henry Ford Health System for care management and an improved health care experience, including concierge services.

 

“It has to be more than reduced cost I’m going to give to my members,” said Savageau. “It’s a one-stop-shop. It’s one number, whether you need a physician, a same-day appointment, whether you need a next-day appointment, to get in to see a specialist, nurse case managers that are truly advocating for every single thing you need. It really takes the responsibility off of the employee and their family members and Henry Ford is coordinating all of that for us.”

 

The goal of the approach is familiar to physicians across Michigan—to put patients first.



[3] https://www.businessinsider.com/gms-plan-to-tackle-healthcare-costs-lessens-role-of-insurers-2018-8